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Information provided on this newsletter has been independently obtained from sources believed to be reliable. However, such information may include inaccuracies, errors or omissions. licsridhar.com and its affiliates, information providers or content providers, shall have no liability to you or third parties for the accuracy, completeness, timeliness or correct sequencing of information available on this newsletter, or for any decision made or action taken by you in reliance upon such information, or for the delay or interruption of such information. licsridhar.com, its affiliates, information providers and content providers shall have no liability for investment decisions or other actions taken or made by you based on the information provided on this newsletter.
Investing to save on taxes by itself serves a limited purpose. Hence, it is suggested to align it with your overall plan to get maximum benefit from the products and your financial goals One money resolution that we all make after the mad scramble as the end of March approaches each year is to do better with tax-related matters in the following year. And like all resolutions, this one too fades away soon. Planning to minimize tax obligations is an annual exercise. So, it makes sense to have a set of rules that will make it less of an arbitrary exercise and the execution easier.

Part of The Whole
Planning and investing for tax benefits should not be seen as a stand-alone exercise but as part of the overall financial plan that considers the income and savings abilities, goals and risk profile of the individual. It should be in sync with your needs and goals. A young individual seeking to grow her corpus to meet long-term goals may prefer to invest in an equity-linked saving scheme (ELSS) or the National Pension System (NPS), which offer exposure to equity, while an older investor may find the steady returns with low volatility provided by debt instruments such as the National Savings Certificate (NSC) or Public Provident Fund (PPF) more suitable. Those seeking some income from their investments may prefer the 5-year bank deposits, with the option to receive periodic payouts to investments versus NSC or PPF where the interest is automatically cumulated. These preferences are described in the financial plan and executed via the asset allocation adopted in the investment portfolio. So, it is important that investments made for tax saving also be aligned to this asset allocation. Else, a portion of the annual investments may be working at odds to your goals.

Align Investments with The Ability to Save
The available income and ability to save should be considered when you make investments designed to save on taxes. Mandatory expenses get first claim as does an emergency fund. Investments come at the next stage. Using available income to invest to save taxes before meeting mandatory expenses may result in taking loans to meet expenses. The cost of debt may well cancel any tax saving. A better way would be to first determine the available savings and then assign to investments, including those for saving on taxes. Use tools such as budgets to cut back on discretionary expenses and improve savings to make full use of available tax-saving opportunities.

Understand the Benefit
Select the products that are suitable to your asset allocation and provide the type of tax benefit you need. The benefit may be in the form of deduction from taxable income to the extent of investments made in specified products. These include the deductions for specified investments such as PPF, NSC, or ELSS, or payments and expenses towards home loan, education fees of children and premiums made on life and health insurance. Some investments come with the benefit of exemption from tax of the income earned. For example, specified bonds issued by institutions provide interest income that is exempt from tax. They can be used to earn regular income to meet needs without tax eating into it. Then there are specified bonds that help you avoid paying taxes on long-term capital gains earned on any capital asset, if the gains are invested in these bonds within a given period.

Choose Suitable Products
Prioritize tax-saving avenues based on your individual situation. Use eligible expenses first to reduce taxable income. Expenses such as insurance premiums, home loan obligations and school fees are typically incurred by most people, and these are eligible to be deducted in calculating taxable income. Next, use the mandatory contributions, such as to the Employees’ Provident Fund (EPF), which are also eligible as deductions while calculating taxable income. At the next stage make investments in tax-advantaged products. Select products based on the return, risk and liquidity features so that the investments are aligned to your needs.

For your financial situation to truly benefit from the tax planning exercise, make sure that the money saved on taxes is used wisely to catch up with financial goals.

Source: LiveMint

When was the last time you spoke to your spouse about money matters? And this is excluding budgets for leisure trips. Research suggests that the millennial generation, though supposed to be more open minded and liberal, is in fact, quite shy of discussing money matters with their spouse.

Some common topics people shy away from discussing with their spouses are:

1. Money spent on themselves: exorbitant sums spent on personal shopping, especially for items which can only qualify as indulgences.

2. Starting a joint account after marriage: how much would each one be willing to contribute to it every month, this is especially for dual income households. Sometimes, if the incomes earned have high disparity, it can become an uncomfortable subject to talk about. “

3. Taking a break from work after marriage: it could either be for further studies, traveling, working on a business plan or maybe when the wife is expecting... The matter at hand then is, would the partner still working be able to support the one on the break, financially? Discussing these issues is not only important but pretty much the need of the hour, if you have serious wealth creation goals or any goals for that matter. Here’s how you should approach the subject:

1. Timing: There’s a right time for everything. Don’t rush these discussions. Do not do this on a holiday, but maybe a weekend that you both are simply relaxing, without any major plans in place.

2. Converse, do not argue: You are both sensible adults, so don’t take to sarcasm or unnecessary criticism towards your partner, even if you are tempted to. Instead, have a quality discussion about the exact problem you are facing, what your standpoint is and what you can possibly do from thereon, to resolve the issue.

3. Be honest and listen: During the conversation, try to be the listener and actually understand your partner’s concern. Once he or she is done talking, then present your side of the story with sincerity.

4. Don’t expect a rapid resolution: While you may end up landing on the same page, do not get ahead of yourself and expect to reach a conclusion or a solution, after your first discussion. For instance, if you only started addressing these financial concerns after 10 years of marriage, then you should be prepared for some friction at the beginning. Try to ease this friction and make the whole exercise productive.

And remember, there’s nothing a good conversation cannot resolve!

Source: Scripbox

We constantly work for a better life, a better future, and everything in between. But no matter how hard we try, some things are never in our control. Though we cannot predict what the future holds in store for us, we can try to bubble-wrap our finances and to some extent our humane side. Here are a bunch of solutions for situations which could help your financial well-being.

1. Accidents: A road accident, an elderly family member slipping in the bath, or sudden diagnosis of an ailment, all make your savings vulnerable to long hospital bills and other life expenses.

What You Should Do: The ideal way to secure yourself and your loved ones from uncertainties such as these is to get health insurance. Don’t put it off for later. Do it now!

2. Job ‘In’ security: Be it a fancy MNC that you work for, or a promising startup, job security is a myth. Different factors such as lack of funding, poorly managed operations, or even cost-cutting could make your company go on a firing spree. 

What You Should Do: Save a small portion of your salary every month and move it towards an Emergency fund. The fund amount should be equal to six months of your living expenses, so that if you are laid off without notice, you have something to fall back upon, till you find something new.

3. Poor investment decisions: Investing in assets which only benefit from capital appreciation, such as land could turn out to be very poor financial decisions.  In case, you anticipated its value to go up with a new highway being constructed which comes to a halt due to a government shortcoming, it could very well derail your long-term goals. 

What You Should Do: Please don’t make hasty decisions especially with immovable assets, as there is no recovery from those. Take to efficient financial planning before locking your hard-earned money in non-liquid assets.

4. Family Responsibilities: In an event wherein, your family’s bread winner gets into an accident or suffers from a long ailment, you might be asked to take over responsibility for your dependents. Don’t be ignorant of your parent’s investments and commitments, your ignorance could prove costly.

What You Should Do: Make sure every earning member in the family has life insurance, so that in case an of an emergency, your financial well-being is taken care of.

5. Poor Infrastructure issues: We try to secure our home and other property by choosing earthquake resistant buildings, but there are always existing properties, which are not resistant enough and could fall prey to natural disasters such as floods, or tornados. Poor infrastructure could cause damage in such testing times.

What You Should Do: It is economically smart to secure your livelihood by keeping your emergency fund ready as well as keeping your important documents in a bank account or DigiLocker so that no matter how fierce the damages may be, you can resume life after the bad phase.

We cannot control it all, but we can try to be prepared for life and everything that comes with it.

Source: Scripbox
We constantly work for a better life, a better future, and everything in between. But no matter how hard we try, some things are never in our control. Though we cannot predict what the future holds in store for us, we can try to bubble-wrap our finances and to some extent our humane side. Here are a bunch of solutions for situations which could help your financial well-being.

1. Accidents: A road accident, an elderly family member slipping in the bath, or sudden diagnosis of an ailment, all make your savings vulnerable to long hospital bills and other life expenses.

What You Should Do: The ideal way to secure yourself and your loved ones from uncertainties such as these is to get health insurance. Don’t put it off for later. Do it now!

2. Job ‘In’ security: Be it a fancy MNC that you work for, or a promising startup, job security is a myth. Different factors such as lack of funding, poorly managed operations, or even cost-cutting could make your company go on a firing spree. 

What You Should Do: Save a small portion of your salary every month and move it towards an Emergency fund. The fund amount should be equal to six months of your living expenses, so that if you are laid off without notice, you have something to fall back upon, till you find something new.

3. Poor investment decisions: Investing in assets which only benefit from capital appreciation, such as land could turn out to be very poor financial decisions.  In case, you anticipated its value to go up with a new highway being constructed which comes to a halt due to a government shortcoming, it could very well derail your long-term goals. 

What You Should Do: Please don’t make hasty decisions especially with immovable assets, as there is no recovery from those. Take to efficient financial planning before locking your hard-earned money in non-liquid assets.

4. Family Responsibilities: In an event wherein, your family’s bread winner gets into an accident or suffers from a long ailment, you might be asked to take over responsibility for your dependents. Don’t be ignorant of your parent’s investments and commitments, your ignorance could prove costly.

What You Should Do: Make sure every earning member in the family has life insurance, so that in case an of an emergency, your financial well-being is taken care of.

5. Poor Infrastructure issues: We try to secure our home and other property by choosing earthquake resistant buildings, but there are always existing properties, which are not resistant enough and could fall prey to natural disasters such as floods, or tornados. Poor infrastructure could cause damage in such testing times.

What You Should Do: It is economically smart to secure your livelihood by keeping your emergency fund ready as well as keeping your important documents in a bank account or DigiLocker so that no matter how fierce the damages may be, you can resume life after the bad phase.

We cannot control it all, but we can try to be prepared for life and everything that comes with it.

Source: Scripbox
Please do not reply back to this mail. This is sent from an unattended mail box. Please mark all your queries / responses to webmaster@licsridhar.com.
Information provided on this newsletter has been independently obtained from sources believed to be reliable. However, such information may include inaccuracies, errors or omissions. licsridhar.com and its affiliates, information providers or content providers, shall have no liability to you or third parties for the accuracy, completeness, timeliness or correct sequencing of information available on this newsletter, or for any decision made or action taken by you in reliance upon such information, or for the delay or interruption of such information. licsridhar.com, its affiliates, information providers and content providers shall have no liability for investment decisions or other actions taken or made by you based on the information provided on this newsletter.